The terms, conditions and limitations in sub-sections A through E. of Section III. DEFENSE AND SUPPLEMENTARY PAYMENTS in the policy will apply to our duty to indemnify the "First Named Insured" for defense costs and supplementary payments and to our rights as assigned to us by the "First Named Insured".

**IV. LIMITS OF INSURANCE**

A. The insurance provided by this endorsement is subject to the applicable aggregate and each occurrence limits of liability stated in the Declarations, and any "losses" for which we pay indemnity will erode and be counted against such limits.

B. Subject to C. below, if the "First Named Insured" has a direct or indirect ownership interest in the "foreign business operation", our limit of liability for "loss" arising out of any one "foreign occurrence" will be an amount equal to the percentage ownership interest of the "First Named Insured" in the "foreign business operation", as set out in a Schedule attached to this endorsement or listed in a separate endorsement, multiplied by the amount of the "loss." However, if this policy is endorsed to provide for a different percentage allocation of liability in the event the "foreign occurrence" that arises out the insured's or the "foreign business operation's" interest in a joint venture, the allocation set forth in such joint venture endorsement will apply.

C. If the "First Named Insured" does not have a direct or indirect ownership interest in the "foreign business operation", or has an ownership interest of less than 100% but is liable to indemnify the "foreign business operation" for the full amount of the "loss", then, subject to the applicable aggregate and each occurrence limits of liability stated in the declarations, our limit of liability for "loss" will be the amount which the "First Named Insured":

(1) has indemnified a "foreign business operation", or

(2) represents to us that it has a legal obligation to indemnify the "foreign business operation".

The terms, conditions and limitations set forth in Section IV. LIMITS OF INSURANCE in the policy will apply to our duty to indemnify the "First Named Insured".

**V. CONDITIONS**

When this endorsement applies, the following conditions apply in addition to the conditions and limitations provided elsewhere in the policy.

**A. Claims Made/Reported Coverage (if applicable)**

Any requirements in the policy that a claim be first made during the policy period or any discovery or extended reporting period will also apply to all claims made against a "foreign business operation" for which the "First Named Insured" seeks indemnification.

**B. Additional Notice Duties of the "First Named Insured"**

With respect to a "foreign occurrence" which may result in a claim for damages under this endorsement, the "First Named Insured" assumes the duty to notify us, and must notify us in accordance with the standards described Condition F. in the policy.

**C. Proof of Insurance**

This policy may not be offered as proof of insurance in any country where non-admitted insurance is prohibited by local applicable law.

**D. Concealment, Misrepresentation and Fraud**

When this endorsement applies, the "First Named Insured":